Bayer net quadruples to $1.7 b in Q3

Agencies|

Nov 07, 2007, 02.14 AM IST

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FRANKFURT: Drug and chemical maker Bayer said Tuesday that its third-quarter profit nearly quadrupled with help from a massive tax gain, and lifted its sales outlook for the year. The company, which pulled an antibleeding drug off the market this week because of health concerns, also said it would cut 1,500 jobs worldwide at its MaterialSciences unit as it aims to reduce expenses by o300 million ($434.6 million) annually through 2009.

The Leverkusen-based company, famed for its invention of aspirin, earned o1.18 billion ($1.71 billion) in the July-September period, up from o320 million a year earlier. Sales in the third quarter rose 4.5% to o7.79 billion ($11.3 billion), as Bayer reaped the benefits of its acquisition last year of Schering and that company’s portfolio of drugs, including the contraceptive Yasmin and its multiple sclerosis treatment Betaseron.

Pretax profit, a key indicator of the company’s future fiscal health, rose to o1.56 billion ($2.26 billion) from o1.46 billion in the same period a year ago.

“This business trend has strengthened our confidence that this will be another very successful year,” chief executive Werner Wenning said.

Bayer also said it hopes to post sales of more than euro32 billion ($46.36 billion) for 2007, an increase of about 6 percent and higher than the 5 percent the company had detailed before.

But Bayer also said it planned to trim more jobs from its payrolls, part of a cost-savings plan at the MaterialSciences unit that produces polycarbonates and polyurethanes. The cuts will affect about 400 to 500 jobs in Germany, with the rest spread around the world _ about 1.6% of the company’s more than 96,000 workers.

The MaterialSciences unit reported a 1.1% gain in sales to euro2.6 billion ($3.77 billion) from euro2.5 billion a year earlier.

The company’s HealthCare unit, which includes its drug manufacturing operations, saw sales rise 5.7% in the quarter to euro3.68 billion ($5.33 billion) from euro3.48 billion a year ago.

“This increase was mainly due to the strong performance of the business and to synergies already realized from the integration of Schering,” Wenning said. Within the HealthCare group, sales at the pharmaceuticals unit rose 8.1% to euro2.57 billion ($3.72 billion).

On Monday, Bayer halted worldwide sales of its anti-bleeding drug Trasylol at the request of German, Canadian and US health officials pending further analysis of a Canadian study that suggests it is linked to a 50 percent higher risk of death than the other drugs in the trial.

Wenning said the move won’t require Bayer to change its guidance for the HealthCare group.

The consumer health segment saw sales rise 10.2% to euro1.1 billion ($1.59 billion), lifted by sales of its One-A-Day vitamins, and its Advantage product line of animal health products.

“Higher prices for agricultural commodities, increased cultivation of crops for the production of biofuels and a more favorable market environment in Latin America led to an expansion in business,” Wenning said.